Super Micro Computer Inc. (SMCI) is back in the spotlight, jumping 15% in premarket trading on Wednesday after announcing a $20 billion multi-year deal with Saudi-based data center firm DataVolt. Under the agreement, SMCI will supply high-density GPU platforms and liquid cooling systems to power massive AI campuses in Saudi Arabia and the U.S.
This aligns with Saudi Arabia’s broader push into AI, backed by an aggressive digital infrastructure strategy. For SMCI, the deal boosts its status as a critical player in the global AI hardware race—especially in building scalable computing systems for hyperscale deployments.
The scale of the deal is impressive—but the financial specifics are still vague. The $20 billion is spread over multiple years. We don’t yet know how how revenues will be recognized over the years, or what kind of profit margins SMCI can expect. Until those details emerge, it's hard to judge the true earnings potential behind the announcement.
SMCI closed at $43.96 yesterday, with a 52-week range of $17.25 to $101.40. It’s still trading well below its highs. That may tempt momentum traders, but I’m staying cautious.
SUPER MICRO COMPUTER INC (SMCI)
Personally, I’m not buying here. While this deal strengthens SMCI’s long-term positioning, I prefer to wait for the next few earnings reports to see how it translates into actual results. The lack of dividends adds to my caution—this is a high-growth, high-risk stock with no dividend income in the meantime.
Exciting news, no doubt—but for me, it’s watch and wait, not chase and hope.
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